Insurance commissioner accepted free O's tickets Taking insurers' gift violates ethics law

September 29, 1992|By Kim Clark | Kim Clark,Staff Writer

Maryland Insurance Commissioner John A. Donaho has accepted free sky-box tickets to Orioles games from at least two insurance companies, in violation of a state law that bans regulators from accepting gifts from the organizations they oversee.

But the attorney general's office said yesterday that Mr. Donaho did not realize his actions were illegal because the state sent him a memo on dos and don'ts that mistakenly implied he could accept tickets to sporting events.

Mr. Donaho, who is supposed to oversee the financial safety of insurers operating in the state, has criticized one of his ballpark hosts, Blue Cross and Blue Shield of Maryland, in recent weeks for spending too much money on image enhancements such as sponsorship of the U.S. Olympic team and its $75,000- a-year sky box at Camden Yard.

Ralph S. Tyler III, chief of the civil litigation division for the attorney general, said a "typographical error" in an Oct. 5, 1989, memo was to blame for the confusion.

The memo Mr. Donaho received shortly after he took over as the top insurance regulator in Maryland quoted the part of the state ethics law that reads: "No official or employee may knowingly accept any gift, directly or indirectly, from any person who . . . is engaged in activities which are regulated or controlled by his agency."

But the memo went on to say there were several exemptions, including "gifts of tickets . . . to an elected official or employee" for sporting events.

Actually, the ethics law allows only elected officials to accept sports tickets. Appointed officials such as Mr. Donaho are prohibited from accepting them. The director of the State Ethics Commission had no comment and would not say whether this case was being investigated.

Mr. Donaho said yesterday he used the sky box belonging to Blue Cross twice and joined the top executives of USF&G in their sky box once this summer.

And he indicated that he has accepted meals from executives of insurers he regulates.

The state ethics law does allow regulators to accept gifts of "insignificant monetary value," as well as travel, entertainment and meal expenses, if they are participating in a meeting or speaking to a group.

Mr. Donaho said insurance company officials like to discuss things over lunch or at sporting events and that he doesn't have an expense account with which to pick up the tab for those occasions. "I don't happen to like it," he said of the social events. "I would rather devote my time at lunch, dinner and at the ballgame to the main purpose."

Complaining of the sky boxes, he said, "I find that you spend most of your time talking and eating, and you never see the game."

Mr. Donaho insisted he had never believed his acceptance of tickets posed an ethical problem, and he had no intention of repaying the insurance companies. "I would never be influenced by any gift," he said.

But after receiving a corrected memo explaining the state ethics law, he issued a stern memo of his own yesterday, banning any member of his staff from accepting "any gift, meal or other emoluments of any kind" from anyone regulated by the Insurance Division.

The concern over Mr. Donaho's actions followed U.S. Senate subcommittee hearings last week that were harshly critical of the perks provided by Blue Cross to its own employees as well as its gifts to customers and charitable groups.

Blue Cross Chairman and President Carl J. Sardegna offered George V. McGowan, chairman of Baltimore Gas & Electric Co., two trips to the 1992 Summer Olympics worth $5,250 apiece, it was disclosed.

BG&E, with 9,500 employees, has hired Blue Cross to run its health insurance program since the 1940s.

Blue Cross spokeswoman Catherine Campbell said the company was using the trips to reward one of its biggest and best customers.

But Mr. McGowan, who with his wife visited the Games in Barcelona, Spain, on the Blue Cross trip, said through a spokesman yesterday that he expected to repay the insurer personally for his expenses.

"They are just waiting for a bill," said spokesman Arthur Slusark.

Mr. Sardegna had originally planned to join the McGowans in Spain but decided against it after the Senate subcommittee began its investigation into Blue Cross' finances this summer, according to Mr. Slusark and a report prepared by congressional investigators.

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